Expansion of Coverage for Childless Adults Would Also Be Delayed, along with Delay in Cutting Eligibility

At a press conference this afternoon, Governor Walker proposed to delay by three months (until April 1, 2014) the changes enacted in the budget bill to BadgerCare and the state’s Health Insurance Risk Sharing Pool (HIRSP).  WCCF is very pleased that this gives about 100,000 people an additional 90 days to make the transition to Marketplace coverage.

On the other hand, we are very disappointed that the Governor’s proposals will also delay the state’s plans to expand BadgerCare to cover childless adults below the poverty level. The Governor’s desire to keep that expansion of coverage from boosting spending could be accomplished by at least temporarily increasing eligibility of childless adults to 133% of the poverty level, and accepting the enhanced federal funding that would pay all the cost for that improvement. That would actually save $119 million in the current biennium, while giving our state a far better chance of reaching the Governor’s goal of cutting in half the number of uninsured Wisconsinites.A number of the details of the Governor’s plans are still unclear. For example, I’m not sure whether the changes that Walker is recommending will also delay by 3 months the elimination of the state’s current unsubsidized category of BadgerCare coverage for children in families over 300% of the poverty level. In September DHS sent letters to the families of about 3,600 children telling them that those kids were likely to lose their BadgerCare coverage in January.

The changes proposed today will be accomplished by calling a special session of the Legislature, which will probably be held in early December. As I explained in a blog post about a week ago, the Joint Finance Committee (JFC) added an amendment to the budget bill that was supposed to trigger a 90-day delay in the BadgerCare changes if the Marketplace wasn’t running smoothly.  However, the JFC amendment failed to accomplish the stated intent, which apparently necessitates action by the full legislature to accomplish the delay.

Not surprisingly, the Governor has cited the problems with the Marketplace rollout as the reason for needing to delay the BadgerCare and HIRSP changes enacted in the budget bill. Although I have no doubt that the well-publicized shortcomings of the online portal for applications is the primary reason why opponents of the ACA would be willing to delay the sharp cut in eligibility of parents for BadgerCare, I think there are a number of other compelling reasons for a slower timetable, some of which we have been pointing out since last spring.

I’ll elaborate on those reasons at another time, and for now will just point out that it isn’t just the federal computer software that hasn’t been performing properly. The delayed timetable of the state’s software changes has meant that DHS hasn’t been accepting applications for BadgerCare coverage for childless adults. That is expected to be partially remedied next week; if all goes according to plan, the state will then be able to start making eligibility determinations for new applications that use the 2014 eligibility rules. However, the big computer run the state had been planning to make late this month to determine BadgerCare eligibility in 2014 of current participants wasn’t going to be based on the new income and family size rules contained in the federal law.

As a result of the state’s own software issues, stemming from the long refusal to begin implementing the law, many people who will be under the poverty level in 2014 (when the new standards are correctly applied) would have soon begun getting notifications from DHS they were over the poverty level and ineligible for BadgerCare. (Read more on that here.)  The proposed 90-day delay gives DHS a chance to remedy that problem.

In light of the changes the Governor proposed today, state and federal officials have a lot of work ahead of them. Among other things, the state needs to scramble to get a federal extension of the BadgerCare Core plan waiver for the current coverage of childless adults, and DHS needs to delay the effective date of the Medicaid plan amendment that contracts BadgerCare eligibility. However, I don’t think they will encounter any resistance to those two changes from federal officials.

We will follow up as more information becomes available.

Jon Peacock